| | | Yep. Was just getting ready to provide that answer without being asked...
Spent the day poking at charts... and agree miners have bottomed, for now... mostly. There is still a strong variation from issue to issue... and the bottom made mostly isn't one with a lot of enthusiasm in any big reversal yet... but a lot of quality stocks are moving sideways rather than down, now... and a number of better stocks are trending higher... generally in trend with the market... if without the patterns necessarily correlating well between quality and performance...
Look at HL as one... just bumping along sideways at $6.50 resting on the MA...
Look at the indexes, the GDX / GDXJ and SIL / SILJ... and the silver miners appear to have a slight edge in moving higher more predictably rather than being flat... which is more apparent in some issues, not others... but generally it looks right in the aggregate...
SBSW has been doing OK, too... up from $15 to $17 already... making its own weather again...
The DRD daily chart is a good one to look at... it shows the cup and handle quite well, the cup formed from January to June, the handle since then... moving up now from the fresh low of the last week. The prior bottom in May was at $8.75... the recent low at $9.75... so, higher lows... consistent with my charting of gold that has it tracking the lower bound on an up-slope that is still intact since February of 2020...
On the "big picture" and crash predictions... this cycle I noted it pretty clearly when the language suddenly shifted to having all the talking heads predicting a crash at any minute... Feels pretty fake. Looks like it was a coordinated effort to "jawbone" the market lower... and throttle the excesses in enthusiasm back a bit... The difference, now, versus the same thing March/April... is only in having a lot more MSM types participating... with the tones only darker and more dire than back then...
I agree of course that the market is "toppy"... overdue, etc., etc., but saw nothing in the charts to suggest "now"... so mostly just ignored that talk... if not the impact intended by it. Note that the prediction in your newsletter is suitably vague... predicting a major event will occur... "within a year"... Great. Thanks.
Others I see are predicting a bit of a "pause" in the commodities supercycle... not in relation to gold and silver, but in relation to the industrial metals... with copper apparently planning a sabbatical year... not slated to resume higher until the middle of next year... or maybe six months to a year after that...
Which, basically, says they're forecasting a recession... but don't want to say that... while expecting that the imposition of a recession will work to pause the ramp in prices for industrial commodities...
I still think that is a bit overly optimistic in terms of inflation expectations... And, to consider that properly, I think you should ignore the noises being made in Washington D.C., and listen more closely to the noises coming out of Doha and Riyadh. Copper won't get much cheaper... without oil getting a lot cheaper...
OPEC is ramping production up "just" enough to feed the smaller pace of rebound being sustained in a "recovery" now... but that recovery isn't proving to be as spectacular as expected and advertised.
The recovery in oil prices is well ahead of the recovery in everything else... and you should expect it is oil prices, now, and not interest rates... or anything else... that is the throttle that matters in governing both prices and the pace in economic expansion.
I expect OPEC to keep oil about where it is now... which means the real disconnect in the markets is mostly one between a Cathie Wood view of the world that requires double digit growth in tech to be "normal"... and a realistic vision that has the "month long rotation trade" from tech into value... properly seen as a joke.
The market could easily move sideways for a year... with a recovery focused on the smaller stocks that have been fairly well abused already... and those "actually productive" industrial type stocks... utilities... food... the usual defensive issues... A "rotation trade" doesn't happen in two weeks and then burn itself out... but exists as long as market conditions require it must... as remains true, now...
Is there any real reason why software telecom and computer companies have to be the market leaders ?
That's what "they" want... but, a market led by miners has happened before... and will again... whether they like it or not... But, dropping "to the moon" expectations in investments... isn't a part of their schtick... so they might well force the market to fail by trying to maintain the position of the dominant leaders, not allowing a proper rotation to occur. Amusing that we're backing into "can't get there from here" at this point... because their brilliant tech future isn't possible... without building new mines to make the materials they require available in sufficient quantities... Use Musk's slipping of the dates for Tesla build out of new capacity for battery projects... as likely the LEAST of the constraints being realized ?
Tech, now, is not so much over-valued... as it is hugely over-hyped in terms of its potential versus a rational time line... The excess in expectations is driven by Wood as its primary champion... but her pie-in-the-sky predictions can't possibly be realized... Lithium being just one issue... serves as a bellwether for the issue more broadly...
Facebook, Apple, Google, etc., can all rollover and die as far as I'm concerned... take Square with them... Amazon... any others you like... and I don't think its going to matter that much... in the real world. In the fantasy-land of the markets... yeah... that's going to generate some dry heaves and some hangovers...
Didn't see much commentary here (in the U.S., not on SI) , about market events in China over the last weeks.
Reality checks occurring... now providing proofs of things I've been saying for quite a while already... and I'll stick by that analysis. But, the long term inevitability in those things isn't what drives market spasms... rather than recognition events tied to inevitability in a thing actually occurring... The tit-for-tat aspects of global conflict matter and are part of the landscape... but, probably not what matters most in a useful market analysis...
The interconnected nature of markets... imposes brittleness... given how its been arranged... and we're all suffering from that, now... The pandemic has broken many things... I keep pointing out... trade one of them, but the tit-for-tat not outside of that... Even wanting things to go back, to what they were... won't matter... once broken... the parts drift apart and change... and that puzzle won't go back together the way it was.
That drives systemic inflation... one reason the inflation won't be going away... but, it also drives other things... each of which have costs of their own ?
Here in the U.S. the market crash in Chinese stocks has mostly been ignored... But, it matters... not just in being a self inflicted wound that will do real and long lasting damage to the markets in China...
But, here, its a "win"... or, a recognition event in a self imposed defeat in China... I think it has complex impacts on the markets here... that no one is talking about... The "competition" element is part of that...
But, of more immediate impact in market terms... is that it forces China out of an aggressive effort being made to impose market stresses by altering the balances with Fed policy...
China will have to accommodate the market... and in the interconnected markets we have... China doing that is every bit as good as the Fed doing that... even if not quite as good as OPEC doing that by lowering oil prices...
A long way around to saying... a bubble or two popping in China takes the pressure off the other bubbles in the jar... at least for a little while. Pairing that... and a throttling back in the economic aspects of the conflict... with OPEC opening the spigots enough to back away from steadily rising prices... ?
Things appear a bit more stable now than they were a few weeks ago...
Which does nothing to alter the stupidity of current policy... or the inevitability that it generates...
But, a thing being inevitable is not an overly useful factor in an effort made in predicting when it will occur...
I see little indication the U.S. is doing much that is useful, now, to alter the drivers in the economy... or to foster the economy that is required in order to make the adjustments necessary to be successful in the wake of the pandemic... and the economic destruction imposed by the policy responses to it...
Biden's ongoing war on the economy... is not relenting... But, it is running into headwinds...
Haven't heard much talk about raising taxes, lately... ?
It looks to me like "August" has now slipped into "September"...
With a bit more wiggle room... expect to see inflation concerns continuing to be ignored... or pushed aside a bit longer... as inflation continues to be woven into the fabric and become increasingly inevitable...
But, while expecting better performance in gold and silver looking ahead... seems rational... I'll keep a weather eye out for the black swans that have been wheeling overhead, in larger and larger numbers, since 2008... They might well decide to land, all at once, and as an entire flock...
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